Norske Skog posts significantly improved half-year results


PM 3 at the Bruck mill stopped production on 10 July to prepare rebuild.

With higher sales prices and energy self-sufficiency publication paper Norske Skog achieved much better results in the second quarter and first half of the current financial year compared to last year. With half-year sales of NOK7.53bn (2021: NOK4.58bn), the company achieved an operating profit of NOK1.79bn, compared with an operating loss of NOK74m at the same point last year. The net result is NOK1.52bn, compared to a net loss of NOK161m in the first six months of last year. The net result includes a positive non-cash impact of NOK419m from valuation of energy contracts.

One of the strongest contributors to the improvement in the results is likely to have been the significantly higher sales prices for all publication papers. These were about twice as high in the second quarter of this year as in the same period last year. However, Norske Skog explains that the development of its own energy production also contributed to this. At its Bruck plant in Austria, the company started up its new waste to energy plant in the second quarter. This is now running at 100 per cent, Norske Skog explained, and is expected to supply about two-thirds of the plant's steam needs and about one-third of its electricity needs. Construction of a new biomass power plant has begun at the company's Golbey mill in eastern France.

Capacity utilisation of its European paper machines for the first half of the year was 92 per cent, five percentage points higher than last year. Demand for publication paper compared to the remaining capacity in the market was high enough to ensure full order books and good capacity utilisation. In view of the capacity closures and conversions that have already taken place and are still planned, the company expects this to continue this year and next.

PM 3 at the Bruck mill stopped production
on 10 July to prepare rebuild

Capacity conversion projects are also going according to plan, explains Norske Skog. With the shutdown of newsprint production on PM 3 at the Bruck mill, the company marks the next stage in the planned conversion to packaging papers. The PM has been shut down since 10 July and is being prepared for the planned rebuild, the company announced. From the first quarter of 2023, recycled corrugated case material is to be produced on this machine. In the fourth quarter of next year, production of corrugated case material is also to start on the previously rebuilt PM 1 at the French plant in Golbey. Norske Skog expects the two machines to run at 60-70 per cent of their full capacity in the first year after their rebuild and to reach full capacity in the third year. Once at full utilisation, the machines are expected to generate an Ebitda of €70-80m per year, based on historical prices and margins, Norske Skog explains.      

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